The Federal Solar Investment Tax Credit (ITC)
California homeowners looking to go solar can benefit from the Federal Solar Investment Tax Credit (ITC), which covers 30% of eligible costs for solar systems installed through 2032. This tax credit, also known as the Residential Clean Energy Credit, makes solar more accessible and affordable, helping homeowners save thousands on utility bills over time. By combining the ITC with other local incentives, homeowners can make a financially attractive choice that aligns with California's push for clean energy adoption and sustainability.
Qualifying for the ITC
To qualify for the ITC, California homeowners must own their solar systems outright, have them installed by the end of 2032, meet federal tax liability requirements, and install the system on their primary or secondary residence. While the ITC is a nonrefundable credit, any unused portion can be carried over to the following tax year if the homeowner's tax liability is less than the credit amount. This long-term stability of the ITC until 2032 provides a significant benefit for homeowners considering solar systems in California.
California-Specific Incentives
In addition to the ITC, California offers state-specific incentives to encourage solar investments. The Net Energy Metering (NEM) program, now operating under NEM 3.0, allows homeowners to earn credits for surplus solar power sent back into the grid. Under NEM 3.0, adding home batteries to solar systems can enhance the benefits for homeowners, especially those under Time-of-Use billing schemes. The Self-Generation Incentive Program (SGIP) provides financial rebates for energy storage devices, focusing on promoting solar installations with battery storage. Homeowners in high fire-threat areas, those affected by Public Safety Power Shut-offs, low-income households, and medically vulnerable customers are eligible for SGIP rebates. Additionally, California offers a property tax exemption for solar installations, protecting homeowners from increased property tax assessments related to their solar systems.
How to Apply for the SGIP
For California homeowners looking to apply for the Self-Generation Incentive Program (SGIP), they should contact their utility company's program administrator. Pacific Gas & Electric Company, Southern California Edison, Southern California Gas Company, and the Center for Sustainable Energy are some of the program administrators responsible for facilitating SGIP applications based on the customer's location and utility provider.